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Now that the warm embrace of summer has drawn to a close, it’s time for businesses to look ahead to the final months of the year. Careful planning now can set the stage for growth and opportunity in the fourth quarter, but this requires having the necessary capital on hand. Preparing for this period might involve stocking up on holiday inventory and supplies, investing in new or updated equipment, hiring more employees, and launching a Q4 marketing campaign, all of which require funding.
The sooner you secure funding for your business’s Q4 initiatives, the sooner you can implement them. This blog article from Balboa Capital provides tips for obtaining business funding at the end of summer.
Determine your business’s Q4 initiatives.
The first step in determining the funding needed for your fourth quarter initiatives is to clarify what they are. If you have an annual business plan that outlines this information, take the time to review it. If you don’t have a Q4 plan, you will need to create a list of initiatives along with their estimated costs.
After you complete your list, you will have a clear understanding of the funding required. It is a good idea to prioritize initiatives based on their urgency and potential impact on your strategic goals. For instance, if you need to increase your inventory levels for Q4 and your suppliers require additional time to fulfill your order, this initiative should take precedence.
Evaluate your company’s finances.
Before moving forward with one or more Q4 efforts, conduct a thorough assessment of your company’s finances. Evaluate key metrics such as revenue, expenses, and cash flow. Additionally, review your Q4 budget forecasts and compare them against last year’s Q4 performance to ensure they align with your financial goals.
This exercise can help you identify areas of success and areas that may need improvement. It will also help you allocate funds where they are most needed and prevent unnecessary spending.
Select the types of business funding you need.
Once you have determined your business’s Q4 strategies and budget and reviewed your year-to-date finances, you can narrow down the types of business funding you need for the final months of the year. Time is of the essence, so acting quickly will ensure that you are well-prepared to tackle the financial challenges and demands of this period.
The great news is that there are business funding options that can save you time. For example, Balboa Capital, a division of Ameris Bank, offers working capital loans from $20,000 to $250,000, equipment financing up to $500,000, and equipment leasing up to $500,000 with a streamlined approach. Our online application is straightforward, credit decisions are typically made in one hour or less during regular business hours, and same-day funding is available.
Common uses of business funding in the fourth quarter.
Every business is unique and has its own set of strategies and initiatives for the fourth quarter. That said, some methods are standard among most companies, perhaps even yours. Here is an overview:
Holiday inventory stocking: To meet holiday consumer demand, invest in inventory at the start of Q4. Ordering early can help you avoid supply chain issues and stockouts.
Holiday marketing: Increasing your marketing and advertising budgets in Q4 can help your company capitalize on the holiday season and drive end-of-year sales.
Hire part-time employees: The final months of the year will be busy. Hiring part-time employees can help manage increased demand, provide better customer service, and reduce stress on you and your full-time employees.
Equipment upgrades: Financing or leasing new or updated equipment, machinery, vehicles, or technology can be beneficial during the fourth quarter and beyond. Additionally, your investment may be eligible for the Section 179 tax deduction.
Prepare for the application process.
At this stage, you know what type of business funding you need for Q4, allowing you to proceed with the application process. To save time, consult with your lender to determine the requirements for submitting your application. Each lender has its own criteria depending on the type of business funding and the amount of funding requested. This might include business bank statements and business financial statements (e.g., balance sheets, profit and loss statements). If you are planning to finance or lease equipment, have your equipment vendor’s quote or invoice ready.
Another key part of the business funding process is to assess your company’s financial health. Understanding your company’s annual revenue, credit score, and existing debts is crucial, as these factors can significantly impact your ability to secure funding.
Build Q4 cash reserves.
If your business funding application is approved and you utilize it for your company’s Q4 initiatives, that’s great! However, it is crucial to prepare for unforeseen events by building a financial cushion. If possible, set aside cash each week or month that can be used for unexpected emergencies. These might include slow sales periods, disruptions in inventory or supply, or equipment breakdowns. Additionally, the final months of the year can bring inclement weather that may impact your company’s sales.
If your cash reserves are insufficient to cover emergency expenses, consider applying for a short-term working capital loan. This type of funding can be used to cover the costs of many daily business expenses.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.